A novel stock investment strategy based on distributed k-WTA dynamic neural network

This study addresses the problem of stock investment strategy, aiming to select the optimal k (k < n) stocks from a set of n stocks within a distributed topology to maximize investment returns. To this end, we propose a dynamic and adaptive neural network model based on the distributed k-winner-take-all (k-WTA) protocol. Firstly, we reformulate the k-WTA problem as a constrained quadratic programming problem and utilize the Sigmoid activation function to relax equality and inequality constraints. Secondly, by combining the simplified constraints with the graph-based topology of stock interactions, we construct a Lagrangian function and develop a time-evolving dynamic neural network whose neuron states update continuously until convergence, reflecting temporal adaptability and convergence dynamics. Unlike traditional centralized methods, the proposed network allows each stock node to communicate only with its connected neighbors, ensuring decentralized computation and scalability. We further present the hardware implementation and theoretically prove the model's stability and convergence under connected graph topologies. Experiments include six static-input tests (different stock counts, parameters, and Gaussian noise) and dynamic validation using real-world stock data from 30 assets over 50 trading days. All seven experimental results confirm the feasibility, effectiveness, and robustness of the proposed model. Comparative analysis with existing WTA models also demonstrates superior adaptability and convergence performance.